Friday, July 3, 2015

Our trading partner Mike Seery is back this week to give our readers a weekly recap of the futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the August contract are up $.25 this Thursday afternoon in New York as this is the last trading day of the week due to the Fourth of July holiday currently trading at 57.22 a barrel while settling last Friday at 59.63 hitting a 10 week low as I’ve been recommending a short position for over a month and if you took that trade you’ve been very patient as prices have gone nowhere except for yesterday’s trade finishing down over $2 so continue to place your stop above the 10 day high which stands at 61.57 as the chart structure will start to improve next week as well.

Crude oil prices are right at major support as the $57 level is critical in my opinion and if prices do break that I think we could head much lower so continue to play this to the downside as large supplies continue to put pressure on this market as a build in crude oil inventories surprised the market yesterday as the U.S dollar also remains stubbornly strong. Currently we are in the strong demand season for gasoline as many drivers will be on the road this weekend, however the trend is your friend and the trend no matter how stubborn it has been in recent weeks is to the downside in my opinion as I remain bearish.
Trend: Lower
Chart Structure: Improving

Gold futures in the August contract settled last Friday at 1,173 an ounce while currently trading at 1,163 as I’ve been recommending a short position when prices broke the 1,170 level while placing your stop loss above the 10 day high which stands at 1,201 risking around $31 or $1,000 per mini contract plus slippage and commission. Gold futures are trading below their 20 and 100 day moving average breaking out to a 3 ½ month low as a possible retest of the contract low of 1,144 is in the cards in my opinion as I was recommending a short position a month ago getting stopped out so here I’m trying again to the downside as I’m a trend follower and the trend clearly in my opinion is lower.

Gold prices have been very weak despite a possible Greece exit while as I remain very pessimistic as I see no reason to own gold at the current time as the stock market still looks strong and if Greece cannot rally gold I don’t know what can so take advantage of any rallies as the chart structure will start to improve in the next couple of days as the stop will be lowered to 1,187 as the long-term downtrend line is also intact. As a trader you must forget about your previous trade’s winners or losers and stick with your trading system as sticking to the rules over the course of time is the way to go instead of constantly flip-flopping.
Trend: Lower
Chart Structure: Improving

Silver futures in the September contract settled last Friday in New York at 15.77 an ounce while currently trading at 15.70 in a very nonvolatile shortened trading week as I’ve been recommending a short position when prices broke 15.80 and if you took that trade continue to place your stop above the 10 day high which stands at 16.26 risking around $560 per mini contract plus slippage and commission as the chart structure is very solid at the current time.

Silver futures are right at a four month low trading below their 20 and 100 day moving average telling you that the trend is to the downside as the chart structure will improve next week and will be lowered in Tuesdays trade to 16.04 so be patient as the monthly unemployment number was released today basically pretty neutral sending gold slightly lower and having very little impact on silver prices as the volatility has slowed down tremendously.

Silver prices generally are one of the most volatile commodities in the world, however in recent months has been very quiet but something will happen in this market as I’m hoping it’s to the downside as I see no reason to own the precious metals at the current time as I still do believe all of the interest lies in the S&P 500 as money flows will continue to flow out of the precious metals and put into the stock market in my opinion.
Trend: Lower
Chart Structure: Improving

Coffee futures in the September contract are hitting a four week low continuing its grinding bearish trend settling last Friday at 133.45 a pound while currently trading at 127.25 down 600 points for the trading week looking to break the contract low of 126.30 as I’ve been sitting on the sidelines in this market for several months as the trend is lower to neutral at the current time.

As I’ve stated in previous blogs I think coffee is forming a bottoming pattern and if I was a producer I think prices are cheap enough to start accumulating, however as a speculator I see no reason to enter into this market at the current time. Coffee futures are trading below their 20 and 100 day moving average telling you that the short term trend is to the downside, however the 10 day high as over 1000 points away risking about $4,000 from today’s price levels as that does not meet my criteria to enter into a trade so I remain neutral on this as I think the downside is limited in my opinion.

Many of the agricultural markets have rallied including sugar which is also grown in Brazil but we have large supplies of coffee at the current time as I don’t see any large price movement here in the short term as volatility remains relatively low especially for such a historically volatile commodity.
Trend: Lower
Chart Structure: Improving